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Silver Wheaton Corp. Message Board

  • bbbeijing bbbeijing Jun 19, 2006 12:56 PM Flag

    Folks, here are two links ..

    Miss out on these and have only yourself to blame ..

    Fleckenstein: <The commercial-paper-tiger Fed>

    << Another reason why I'm anxious to take the other side of the tough-Fed trade: Even though the Fed is talking tough, the Fed is in fact not tough.

    Recently, we've seen a couple of coupon passes (i.e., Fed purchases of Treasury securities from dealers). And, as economist Carl Pellegrini pointed out last Wednesday:

    "The Fed is not tightening. If it were, do you really believe that the growth in commercial paper outstanding would be 18.4% for the last few weeks; and that bank loans and commercial paper outstanding would be up a seasonally adjusted rate of 24.6% for the last seven weeks, 15.7% for the last 13 weeks, and 13.35% for the last 52 weeks?" Thus, not only is the Fed not tough, it has no real intention of being tough."

    ... it has to do something to make sure it's still perceived as being in charge." >>

    <<.., and then both stocks and metals will rally. But while stocks will just be rallying in a bear market, the metals' rally will be a continuation of the bull market they've been in -- although it's sometimes hard to keep that in perspective when the action gets as ugly as it has been.

    Remember the reason to own metals in the first place: The Fed is not in charge. At some point, when the world understands that, it will cause an acceleration of the bear market in the dollar, and that will be the source of additional problems for the stock market. Metals, among other things, are an insurance against that outcome....">>


    Dan Norcini:
    <<.. The intended effect was to be to so completely dishearten and discourage the public and the investment funds from buying gold that it would suffer an ignominious death and fall off the radar screens of investors. That would effectively get it out of the headlines and remove the pesky metal��s telltale warning signs about the true state of the global economy. No more gold stories equals happy Central Bankers.

    There is no doubt that the plan worked to near perfection �C I have never seen so much near total despair and disillusionment among the friends of gold as I witnessed this past Tuesday and early Wednesday. Out of everywhere, as if on cue, analysts confidently pronounced that the bull market in gold and in commodities was over, finis, kaput!

    However, a funny thing happened on the way to the forum. Someone showed up to meet the brazen sellers and began to buy in huge lots. Gold quickly ricocheted off the $545-$550 level running all the way back to near $590 in two days. Today, Friday, 6-16-2006, when the same group of sellers once again attempted to break the back of the gold market which had come roaring back in overnight trade in both Asia and in Europe, and began their coordinated selling assault during the New York trading session (what else is new), out of nowhere buying came out of everywhere forcing them to beat a hasty retreat. >>


    Happy investing!

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    • Tightening policy doesn't mean no more presses running. Tightening policy can affect the general public because rates rise the general public can't affort the loans or can't affort to refinnance or just won't be approved for the loans.

      On the other hand with such HUGE debt the US government holds it needs paper to operate thus they keep on printing IOUs in form or bonds. As the world is turned off from buying these IOUs the FED will step in and buy them while printing money for the government. Since government is obligated to pay down the debt at some time and with a lack of USD flowing into US from around the globe the government will raise taxes. FED isn't a government agancy but owned mostly by other privatly owned banks (from my understanding) thus I believe that FED is in control but it's just depanding on how FED wants to transfer wealth and how it wants to be percieved by the general public.

      When Rothchilds family went into banking business I doubt they went into it to keep printing paper and serving the public but it was to continue wealth creation for themselves. With fractional reserve it doesn't cost bankers much to loan out paper. As they tighten and start moving the wealth, it's in their benefit to take possesions instead of paper. Debt is a great tool for transfering wealth and where is a general public when it comes to debt? Most haven't been taught how to save or that having debt is BAD! In the 30s it was mostly the genral public that suffered and NOT the ultra wealthy.

      Also the FED or any other banker will not make it obvious that they want your money. Just like Market Maker will make it hard for a trader to make money because that is they're whole game plan. Sometimes you'll see 15k or 30k orders on the ask side while the stock is moving lower. MM know how to trick the public into buying and thus is similar idea with the bankers.

      This is best time to get out to debt and have physical bullion on your side.

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